Taoiseach signals 'intensive follow-up' to bank meeting

THE TAOISEACH said there would be an “intensive follow up’’ to the meeting the two Ministers in the Department of Finance had with the European Investment Bank (EIB) on Tuesday.

Enda Kenny said the discussions, involving Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin, revolved around “blockages’’ in the system for the release of public private partnerships, for which the EIB was the major funder.

“Were those blockages to be released, then clearly a range of infrastructure sectors could certainly benefit from that in Ireland,’’ Mr Kenny added. “However, that will not happen in the immediate future.’’

The Taoiseach said the Department of Finance, the Government and the Economic Management Council were constantly in touch about the issue of credit to small and medium size enterprises (SMEs).

“This means face-to-face meetings with representatives of the banks, which have set out their programme on new lending for this year,’’ he added.

Mr Kenny said it was very difficult to force a bank to lend in time of recession, and he received complaints about that.

“I am unhappy about those complaints, but if the banks are able to deliver on the plans they have produced, then they certainly will be constructive,’’ Mr Kenny added.

The Taoiseach said many small businesses previously got money on the basis of property assets. That was no longer available to them, because banks now had to lend on the basis of assessed risk and cash flow projections.

Fianna Fáil spokesman on small business John McGuinness said the Taoiseach had told the House on Tuesday that €3.5 billion would be earmarked for small businesses in the course of this year.

“The fact is that owners of small businesses will tell us, as we canvass for this treaty, that it is the same environment as 2011, 2010 and 2009, and that they are simply not lending money,’’ he added.

Mr McGuinness said action was required within the business world to help the backbone of the Irish economy.

This was made up of the SME sector, which created 700,000 jobs and was made up mainly of families who were central to community developments and so on.

He added that 50 per cent of businesses applying for loans had been refused, while 91 per cent found the banks more difficult to deal with than in the past.